T-Mobile accused of making hundreds of millions of dollars with bogus charges

T-Mobile US has been accused of cramming third-party charges into bills. The FTC yesterday filed a lawsuit (PDF) against the wireless carrier alleging that the company knowingly charged its customers for a premium texting service that was never authorized by them. The Federal Communications Commission has also opened an investigation into the issue.

The FTC claims that T-Mobile fraudulently billed its customers for third party services like $10/month horoscopes, dating tips, and more. The government agency also accused the company of collecting a 35 to 40 per cent share, even after being made aware that these subscriptions were scams.

Not only this, the company also reportedly disguised the bill details with confusing labels like “8888906150BrnStorm23918” in order to make it difficult for the customers to understand why were they being charged for.

When customers disputed the charges, the carrier either offered partial refunds or simply ignored the complaints. In some cases, the company even asked consumers to seek refunds directly from the scammers.

"We have alleged that T-Mobile took a hefty cut out of these charges", said Jessica Rich, FTC director of consumer protection. "In aggregate this has translated to hundreds of millions of dollars in revenues for T-Mobile". The lawsuit calls for T-Mobile to issue refunds.

Moving quickly, T-Mobile termed the lawsuit as "unfounded and without merit". In a statement released yesterday afternoon, CEO John Legere said, "We are disappointed that the FTC has chosen to file this action against the most pro-consumer company in the industry rather than the real bad actors".

The news comes days after Legere compared phone contracts used by AT&T and Verizon to violent sexual assault. Speaking at the company's Uncarrier 5.0 event in Seattle, he said, “These high-and-mighty duopolists that are raping you for every penny you have. The f***ers hate you”.